To engage in first-degree price discrimination,a firm must:
A) be able to set P MC.
B) know each consumer's maximum willingness to pay.
C) prevent low-value consumers from reselling to high-value consumers.
D) All of the answers are correct.

Question

To engage in first-degree price discrimination,a firm must:
A) be able to set P > MC.
B) know each consumer's maximum willingness to pay.
C) prevent low-value consumers from reselling to high-value consumers.
D) All of the answers are correct.

Quizplus · Accepted Answer

First-degree price discrimination requires a firm to be able to set prices above marginal cost (A), know each consumer's maximum willingness to pay (B), and prevent resale from low-value to high-value consumers (C), making all the given options correct.

To Engage in First-Degree Price Discrimination,a Firm Must